Bypass mail needs to look at other measures before asking for pay from Permanent Fund

Posted: December 6, 2011 - 12:00am

The Post Office is working to redefine its role in American life.

It wasn’t that long ago folks used the U.S. Mail to send Christmas lists, pay bills, get magazines and communicate both professionally and personally.

Those functions are not so slowly giving way to electronic communication. In our household, at least, bills are paid online and Christmas lists are emailed.

We still get magazines, since many publishers still inexplicably charge cheaper rates for ink-and-paper product than they do for their electronic counterparts (a topic for another time, perhaps). However, I could probably count the number of honest-to-goodness letters I’ve received in 2011 without having to take my shoes off.

Still, the Post Office is far from a dinosaur. Someone’s got to deliver all those things ordered online, for instance, and the USPS does a lot of that, both on their own and for other package delivery companies that can’t or won’t get to some of America’s far-flung areas — of which Alaska has plenty. Other businesses still find value in placing a catalog in your hand. This is often derided as sending “junk mail,” but I’ve been known to flip through some of those publications from time to time, and it wouldn’t surprise me if many of you do, too.

So, for the foreseeable future, the Post Office will remain a presence in American life. However, since the money it makes from being one of the country’s main forms of communication is dwindling, and its expenses are growing — fuel and labor costs being the main culprits — it’s sure to be a smaller one. In its current configuration, it’s losing tons of money, $5.1 billion last year, according to the Washington Post.

Part of the Post Office’s redesign is looking to trim costs. It’s negotiating with its labor unions. It’s looking to close locations — including, possibly, the Douglas Post Office. And, recently, it put bypass mail in its sights, raising the eyebrows — and the ire — of some in Alaska by suggesting the state tap its $38.2 billion Permanent Fund to pay for the cost of running the operation. The likelihood of that happening is somewhere along the lines of the Cubs winning the Super Bowl. Unfortunately, even raising the idea made enough important people — like Alaska’s congressional delegation — see enough red that a lot of smaller, sensible ideas the Post Office floated were lost in the kerfluffle.

The Post Office, in a report on the subject, does a good job of pointing out bypass mail isn’t really mail at all — it’s freight. Ordinarily, the Post Office doesn’t handle freight at parcel post prices, which are the prices bypass mail users pay. However, allowing producers and wholesalers to pay parcel post prices to ship goods to remote Alaska locations — of which there are plenty — made it possible those institutions to do business in, say, Naknek. Was it a government subsidy? Absolutely. It was one of thousands. It just happened to use the Post Office — whose universal service obligation subsidizes mail delivery to other remote locations — as the vehicle for the service.

Government subsidies aren’t in vogue right now, given our country’s sovereign debt issues. And, like all other subsidies, it’s certainly appropriate to review the effectiveness and necessity of bypass mail. But cutting the program off cold turkey or forcing state or federal taxpayers to foot a $73 million (and sure to grow if nothing is done) annual bill should be a last resort. There are other, less drastic steps that should be tried first, all of which were floated by the Post Office:

• Allow the Post Office greater flexibility in negotiating rates with the airlines it uses. This would shift more of the cost of bypass mail onto those who actually use it (shippers and receivers) and away from other postal customers.

• Make bypass mail more like parcel post mail. The Post Office claims bypass mail is actually priority mail service at parcel post rates. Parcel post mail would mean longer shipping times and the end of door-drop delivery. Asking merchants to come to the airport to pick up their pallets of goods doesn’t seem to be an unreasonable request.

• Give the Post Office more quality control of the program. As it stands, shippers deliver their goods straight to the airlines, who in turn get the products straight to the recipients, all while the freight is paid for by the Post Office. From 1972 until 2007, the Post Office broke even, according to the National Association of Letter Carriers, despite its universal service obligation and first-class postage rates lower than any other unsubsidized rate in the world. That means the Post Office survived and thrived for 35 years by squeezing the most out of every dollar it took in. It’s now trying to use that expertise in efficiency as it consolidates its operations for the 21st century. Surely, it should be allowed to encourage efficiency in its contractors, just like private businesses are allowed to.

The U.S. is trying to adjust to a communications environment where the Post Office will play an increasingly smaller role, even though it wasn’t that long ago — 2006 — when the Post Office delivered its highest-ever yearly volume of mail. But, just as Congress is urging caution and deliberation where the Post Office wants to make not-easy-to-reverse changes, so too should it urge deliberation and small steps when it comes to bypass mail. It’s OK to ask for change in this current economic environment, and perhaps the bypass mail system should be gradually replaced with better infrastructure and other methods of delivery. But a pay-or-else threat needs to be put back in the Post Office’s pocket until all the avenues it suggested are evaluated.

• Charles Ward is Deputy Managing Editor of the Empire. The views he expresses are his own, and do not necessarily reflect the views of the Empire.